Elop was right to kill Symbian

Nokia's (OMX: NOK1V) CEO Stephen Elop recently admitted that Symbian phones are bleeding market share. Much of the recent decline has been attributed to Elop's comments in connection with the announcement on cooperation with Microsoft, where he made it clear that Symbians role at Nokia is that of a franchise transition period OS on lower-end phones.

The media and investors were talking about a mistake of massive proportions and were saying that Elop should not have communicated on the impending demise of Symbian to the outside, which would have allowed Nokia to sell more Symbian phones in the interim as consumers would not have started worrying about the future of the OS . Subsequently Nokia has backtracked a little bit on those comments and Symbian has received upgrades that have vastly improved its performance.

Current leadership theorems however support Elop's handling of the situation. In order for the message to truly get to Nokia's employees and to the entire organization, drastic measures were needed. If the management wasn't perfectly clear in all its communications to the outside as well as internally, resistance to change would have continued, especially in a behemoth like Nokia where workers had only experienced prosperous times.

Additionally much of the Symbian sales come from countries where Elop’s comments don’t have so much weight. For Nokia’s workers and software developers they were of course a clear sign of things to come, in that sense it is good to be as forthcoming as possible to allow people to have time to prepare for change.

Nokia’s result tomorrow will undoubtedly reflect struggles of a company undergoing a massive change but irrespective of the final outcome, the downfall in the share price as of late is not the fault of the current management but that of stagnation during the previous few years. The stock has lost much of the early 2011 gains in the last two days as results used as a gauge for Nokia’s earnings (Apple, Texas Instruments, Ericsson) have lowered expectations.